EC clears EssilorLuxottica GrandVision takeover

Belgium’s GrandOptical chain of 35 stores to be sold

The European Commission (EC) has approved the proposed acquisition of GrandVision by EssilorLuxottica, subject to conditions, including the divestment of around 350 stores in three countries.

EC executive vice president, Margrethe Vestager, in charge of competition policy, said: “Our in-depth investigation showed that, by acquiring a greater retail footprint, EssilorLuxottica could have degraded the access of rival opticians to EssilorLuxottica’s branded eyewear products in Belgium, Italy and the Netherlands. This would mean less choice and higher-priced eyewear for consumers in those countries. The remedies proposed by EssilorLuxottica will address this risk by ensuring that competition at the optical retail level remains vibrant at national level and to the benefit of customers in these countries.”

This decision follows an in-depth investigation of the proposed acquisition, focusing on competition concerns that could arise from the combination of EssilorLuxottica’s strong market position in the wholesale supply of optical products, and GrandVision’s leading presence in the retail distribution of these products. During its investigation, the EC received feedback from more than 4,300 opticians throughout Europe.

Following its in-depth market investigation, the EC was concerned that the transaction, as initially notified, could worsen rival opticians’ access to EssilorLuxottica’s products in Belgium, Italy and the Netherlands. In particular, the Commission found that in all those countries the merged entity would have the ability and incentive to leverage its important position in the wholesale supply of frames to make it more difficult for competing retailers to access eyewear manufactured and distributed by the merged entity, for example, by reducing choice or raising prices charged to retailers for frames. This would weaken the competition in these markets, and ultimately leading to higher prices or less choice for consumers.

For Italy, the transaction would in addition bring together the two largest retailers operating in the market through chains, thus creating the largest player on the optical retail market, almost three times as large as the second player. This would considerably weaken competition in the Italian market, ultimately harming consumers.

To address the EC’s competition concerns, EssilorLuxottica offered to divest part of its retail operations in each of the countries in which the Commission had concerns.

• In Belgium, the GrandOptical chain and its 35 stores will be sold but without the brand name. The purchaser will have a license while rebranding these stores to its own choice of name.
• In Italy, the merged entity will divest a total of 174 stores, which includes the whole of EssilorLuxottica’s VistaSi chain together with 72 stores from the ‘GrandVision by’ chain. The VistaSi brand will be transferred and the “GrandVision by” stores will either be rebranded to VistaSi or to the purchaser’s own brand.
• In the Netherlands, 142 stores from the EyeWish chain will be sold, together with the brand name. The merged entity will keep some stores from this chain and will have to rebrand them under a new name.

The Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns.

EssilorLuxottica stated that the outcome of the proposed transaction was still dependant on the sign off from competition authorities in Chile and Turkey, as well as the decisions regarding ongoing litigations.

Stephan Borchert, CEO of GrandVision, said: “This is a significant milestone in the approval process for the transaction, and we are pleased that the regulatory authorities recognise the benefits the transaction will bring to our stakeholders.”